On November 25, 2018, cash-strapped Venezuela has struck a US$ 1.4 billion deal to retain control of Citgo Petroleum Corp., one of the latest settlements that keep the country’s U.S. crude refineries from falling into the hands of creditors, according to Canadian court documents.

The deal calls for President Nicólas Maduro’s government to pay off one of Venezuela’s creditors Crystallex International Corp., a defunct Canadian mining company trying to collect on a US$ 1.4 billion arbitration judgment.

The agreement resolves arbitration claim against state-owned Petróleos de Venezuela SA (PDVSA) that sought to wrest control of Houston-based Citgo, Venezuela’s U.S. refining subsidiary and a critical source of dollar revenues for the cash-strapped country.

A U.S. court had authorized the seizure of Citgo’s U.S. corporate parent to compensate Crystallex for that debt. Under the settlement, Crystallex agreed to suspend a planned auction of shares in Citgo’s parent company.

Venezuela expropriated a Crystallex gold mining project in 2011, which led to the 2016 arbitration award. Crystallex and Venezuela reached an agreement last year, but Caracas failed to maintain payments after transferring US$ 75 million.

Crystallex Chief Executive Robert Fung said Sunday that Venezuela had already paid $500 million in cash and liquid securities. Venezuela agreed to pay the remainder in installments by early 2021. The country is required to post collateral by January 10, 2019, to secure the remainder of what it owes on the judgement. If the collateral isn’t posted, Crystallex could resume the legal proceedings related to the suspended "auction process".

PDVSA is repaying almost all of those debts with oil, but a meltdown in its oil industry has left it struggling to fulfill obligations.

In October, ConocoPhillips said it had received US$ 345 million in the third quarter from PDVSA as part of a four-year deal to settle a US$ 2 billion arbitration award stemming from the loss of assets during a 2007 nationalization drive.

CONCURRENT DEVELOPMENT

As per the latest news reports, PDVSA has begun talks with shipping firms to set up a second ship-to-ship (STS) operation off the country's eastern coast in an effort to increase sagging crude exports. Earlier this year, the state-run company began sea-borne oil transfers off its western coast, mainly to move crude and fuel oil to Asia, after its ports clogged with tankers waiting to load and its Caribbean terminals faced seizure.